Joseph Rugg's Health Law Blog

In its news release on January 20, the U.S. Attorney’s Office for the District of Massachusetts announced that that the South Shore Physician Hospital Organization in South Weymouth has agreed to pay $1.775 million to settle allegations of operating a recruitment grant program through which it paid kickbacks to its physician members in exchange for patient referrals.  The news release talks about false claims as if the care was not given, but the claims were only “false” because of the kickback taint.

There is great pressure on physicians and hospitals to form networks to capture patients, improve care, and reduce costs.

Without knowing, I am guessing that the grant program by SSPHO was intended to build the network and reward physicians who joined (and referrals were probably required to be made to the hospital and other physician network members). I can see how this could be construed to be a kickback, but we need these networks and I suspect that no harm was done to the Medicare or Medicaid programs.

Even if my guess about the SSPHO is wrong, it’s still time that we allowed healthcare innovators and entrepreneurs to act like real business people and recruit and reward participants in a sensible and straightforward manner — without calling it a kickback.